© Reuters
By Peter Nurse
Investing.com – European stock markets are expected to open marginally higher Monday after recent weakness, with the focus on the German Ifo business climate index for a gauge of the strength of the Eurozone’s dominant economy.
At 02:00 ET (07:00 GMT), the contract in Germany traded 0.1% higher, in France climbed 0.1%, and the contract in the U.K. rose 0.1%.
European equities suffered heavy losses last week, with the German almost 3% lower, after the eased the pace of its interest rate hikes but stressed significant tightening remained ahead as it fights elevated .
ECB governing council member Klaas Knot said on Friday that the central bank has a longer way to go in raising interest rates than the , but ultimately won’t raise its rates to the same level as its U.S. counterpart.
This promise of more interest rate hikes ahead as well as likely weak economic growth has weighed on sentiment, but investors will be hoping for some improvement from the for December later in the session.
The report comes after data last week showed that the downturn in German economic activity moderated for a second straight month, indicating that a likely recession in the bloc will be shallower than previously thought.
Also of interest will be comments by ECB Vice-President Luis de Guindos in Madrid later Monday, as investors look for more clues as to the thinking of the central bank policymakers.
In corporate news, Germany is also poised to take on the risks associated with €216 billion (€1 = $1.0629) of derivatives built up by energy giant Uniper (ETR:), as it moves to nationalize the company hit hard by the region’s energy crisis.
Crude oil prices rose Monday, boosted by the decision of the Biden administration to begin refilling its strategic reserves as well as hope for demand growth from China in the new year.
The U.S. government said on Friday that it will initially buy 3 million barrels of oil for its reserve, having run the Strategic Petroleum Reserve down to its lowest level in nearly 40 years in a bid to curb rising fuel prices this year.
Additionally, China has abandoned its strict ‘COVID-zero’ policy, and while the world’s top crude oil importer and second largest oil consumer is experiencing a leap in cases as it reopens, hopes are increasing that economic activity will expand in 2023.
By 02:00 ET, futures traded 0.4% higher at $74.75 a barrel, while the contract rose 0.3% to $79.30. Both contracts were still trading near one-year lows, having logged steep declines in recent sessions on fears of a potential recession in 2023.
Additionally, rose 0.1% to $1,800.85/oz, while traded 0.5% higher at 1.0631.
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